Oracle

Advanced Planning

Why upgrade from MRP to Advanced Planning

Sid Perera
Principal Consultant

Traditional Approach
Multi-step planning processes, high latency, limited collaboration
Customers

Suppliers
Tier 2

Response 1:

Tier 1

Maintain Excess Inventory

Response 2:
Distribution
Plans

Marketing
Forecast

Production Manufacturing
Plans
Plans

Reserve Production Capacity

Response 3:
Expedite Everything!

Sales
Forecast

Mfg
Forecast
Demand Planning
Process

?
t = weeks
Supply Planning
Process

Supply chains built on INVENTORY

Move To A More Competitive Model

E-Business planning solution: zero latency, real-time collaboration
Customers

Suppliers
Tier 2

Enable closed loop

Tier 1
Internet

Portal
Collaborative
demand plan

Portal

Collaborative Planning
Process

Collaborative
supply plan
Automated
exceptions

Automated
exceptions

Single holistic
plan

Automated
exceptions

Sales
forecast

Demand Planning
Process

Provide total supply chain

visibility

Marketing
forecast

Mfg
forecast

planning processes
across your value chain

Make better decisions

React immediately to

Consensus
forecast

changes in supply chain

t = hours
Supply Planning
Process

Build your supply chain on INFORMATION not inventory

Our Solution

Copyright Oracle Corporation, 2003. All rights reserved.

Oracle Advanced Planning

Complete e-business planning solution
Supply Chain Intelligence

From detail to summary

Sales and Operations

Planning

Finance
Maintain

HR
Projects

Service

Make
Procure

Plan

Demand Planning

Inventory Optimization
Supply Chain and Manufacturing Planning
Global Order Promising
Deployment Planning**
Manufacturing Scheduling

MS

Transportation Planning*

TP

SC Exception Management

CP

All Product,
Customer,
& Supplier
Information

Fulfill

SCI

Develop
Market
Order Sell

DP

IO
ASCP

GOP
ASCP

CP

Collaborative Planning
From short-term to long-term

* Coming in 11i.10

** Coming in 11i.10+

Oracle Advanced Planning

Key capabilities
Improve forecast accuracy

Collaborative demand planning with customers

Increase visibility and reduce shortages

Collaborative supply planning with suppliers

Collaborate across multiple tiers

Reduce inventory carrying cost

Vendor managed inventory

Consigned inventory

Analyze demand and supply fluctuations

Waterfall analysis
Liability analysis

React quickly to supply chain events

Supply chain exception management

Global fulfillment visibility

Oracle Advanced Planning

Enables you to:

Improve delivery performance up to 35%

Reduce inventory levels up to 25%
Improve forecast accuracy up to 35%
Reduce planning cycle time to hours

Copyright Oracle Corporation, 2003. All rights reserved.

WHERE TO START?

Copyright Oracle Corporation, 2003. All rights reserved.

From MRP
Unconstrained material and
resource planning
Basic forecasting
Basic available to promise
No collaboration
MRP

Oracle Applications
(10.7, 11.0, 11i)

No path forward

Copyright Oracle Corporation, 2003. All rights reserved.

 to Unconstrained ASCP
Same effort to deploy as MRP Reuse all existing setup!

Improve planner productivity

ASCP

Reduce your planning cycle time

from months to hours

Unconstrained

APS Common Infrastructure

Improved exception resolution

Reduce non-value added costs

Oracle Applications
(10.7, 11.0, 11i)

Holistic planning
Improved scalability and performance

Make better decisions faster

MRP

New productivity enhancing UI

Planner collaboration

Workflow based exceptions

Drive continuous improvement

Integrated business intelligence

Foundation for future growth

ASCP = Advanced Supply Chain Planning

Common Infrastructure

Implementing Unconstrained ASCP

Same effort to deploy as MRP Reuse all existing setup!
Discrete Manufacturing

11

Upgrade to 11i (optional)

Process Manufacturing

Upgrade to 11i (mandatory)

Install

Install ASCP using the 11i rapid install process

Decide on deployment (one instance, distributed)

Setup

Link Planning instance to ERP source instance

Collect

Run data collection process to collect ERP data for planning

Collect from one or more source instances

Plan

Define plan and plan options

Run plan

Analyze

Launch Planner Workbench to analyze plans

Copyright Oracle Corporation, 2003. All rights reserved.

What our customers say

Mykrolis
30 day implementation; improved on-time delivery from 70% to 90%
"The Oracle solution provides our planners with instant access to global information, and
simulation tools for reacting to changing market conditions. The result is more accurate
plans, fewer errors, and improved bottom line service to our customers."
--Mike Dapcic, CIO

American Power Conversion

"For the first time, we could set up a clear sourcing network, set minimum and maximum
levels, and drive internal replenishment based on demand. This took a lot of the guesswork
out of manufacturing planning and greatly reduced our inventory levels."
--Lisa Sipe, CIO, American Power Conversion

Primarion
"Oracle Advanced Planning gives us more time to run our day to day business operations.
Instead of dedicating an internal team to generate updated inputs and running manual tools,
we simply generate one plan from which to execute."
-- Keith Palevsky, Director of
Business Operations, Primarion

12

Copyright Oracle Corporation, 2003. All rights reserved.

STRONGER FOUNDATION
FOR THE FUTURE

13

Copyright Oracle Corporation, 2003. All rights reserved.

Two Growth Paths

Use an incremental approach to extend your foundation

Global Order
Promising

ASCP
Optimized

Inventory
Optimization
Collaborative
Planning
Demand
Planning

MRP

1. Improve the quality of

your plans

Constrained

Unconstrained

APS Common Infrastructure

2. Take advantage of
additional functionality

Oracle Applications
(10.7, 11.0, 11i)

ASCP = Advanced Supply Chain Planning

Constrained planning
Optimized planning

Demand Planning
Collaborative Planning
Global Order Promising
Inventory Optimization

1. Improve the quality of your plans

15

Copyright Oracle Corporation, 2003. All rights reserved.

Constrained and Optimized Plans

For planners, not programmers

Improve plan quality

ASCP
Optimized

Constrained

Make better decisions faster

Unconstrained

MRP

APS Common Infrastructure

Oracle Applications
(10.7, 11.0, 11i)

Automatically recommend alternative

suppliers, components, resources,
facilities, and routings
Generate feasible plans that respect
your material and resource constraints

Cost based optimization: maximize

profit, inventory turns, and customer
service
Out-of-the-box optimization
Priority based decisions
Drag-and-drop rescheduling

Improve resource scheduling

Schedule simultaneous resources

Batch resources
Minimum transfer quantities

What our customers say

Tube Investment
Reduced inventories by 20%, increased market share from 50% to 80%
The most exciting feature of the system to a manufacturer is constraint-based planning.
Oracle provides the ability to plan, including resource and material constraints, based on
suppliers' inventories and capacities."
-- Mr. V. A.
Raghu, Managing Director, Tube Investments Ltd.

Canon Virginia
Replaced i2 and cut planning cycles from weekly to daily
"With Oracle E-Business Suite 11i, we have moved from weekly to daily planning, which has
significantly improved our response time."
-- Clair Walizer,
Senior Developer and Analyst, Canon Virginia, Inc

Sony Semiconductor
Improved delivery performance, reduced planning cycle time from multiple weeks to
days, increased productivity, improved plan quality with holistic, integrated global
plans for the entire supply chain, real-time integration between planning and execution

17

Copyright Oracle Corporation, 2003. All rights reserved.

2. Take advantage of additional functionality

18

Copyright Oracle Corporation, 2003. All rights reserved.

Expand into
Demand Planning
Global Order
Promising

ASCP
Optimized

Inventory
Optimization
Collaborative
Planning
Demand
Planning

MRP

Inventory Optimization

Constrained

19

Available and capable to

promise

Collaborative Planning

Oracle Applications
(10.7, 11.0, 11i)

Postponement and risk pooling

Global Order Promising

Unconstrained

APS Common Infrastructure

Consensus forecasting

Collaborate with your

customers and suppliers

Copyright Oracle Corporation, 2003. All rights reserved.

Demand Planning
Drive to accurate consensus forecast
Customers

Compare and consolidate disparate

forecasts

Internet

Portal
Collaborative
demand plan

Improve forecast accuracy

Automated
exceptions

Marketing
forecast

Demand Planning
Process

Consensus
forecast

Continuous demand planning process

Automated internal collaboration

Improve sales promotion planning

20

Better statistical forecasts

Forecast planning percentages for models and
options
Get visibility to customer demand changes

Improve demand planning cycle time

Sales
forecast
Mfg
forecast

Sales, Marketing, Manufacturing, Customers, Point

of Sale (in units or $$)
Multi-dimensional OLAP to allocate and rollup

Forecasting integrated with promotion planning

Measure effectiveness

Copyright Oracle Corporation, 2003. All rights reserved.

Inventory Optimization
Manage to uncertainty, reduce inventory, improve customer service

Reduce inventory without sacrificing

customer service

Postponement

Risk pooling

Manage supply chain variability

Central
Distribution
Centers

Choose the best service level strategy

based on cost and revenue

Inventory budget constraints

Final
Assembly

Invest in profitable channels,

products, and customers

Manage seasonality and product life

cycle characteristics

Recommend time-phased safety

stock to supply planning

Out-of-the-box optimization

For planners, not programmers

Customers

Regional
Distribution
Centers

Contract
Manufacturers

Suppliers

Without Postponement

With Postponement

Global Order Promising

Promise more accurate orders with zero downtime, 24x7

Promise orders based on:

Global statement of availability

By channel, customer, or product

Priority and stealing rules

Manage commitments to key

customers

22

All facilities, material, resources, and

suppliers

Allocate available supply and capacity

Material availability
Manufacturing capacity
Transportation capacity
Supplier capacity

Re-schedule and re-sequence your backlog

Copyright Oracle Corporation, 2003. All rights reserved.

Multi-tier Collaborative Planning

Full visibility and synchronization across extended supply chain

Customer

You
Demand
systems

Run plan

Contract
Manufacturer

Supplier

Plan your extended supply chain

Consensus
forecast

Supply
forecast

Demand
boards
Run plan

Supply commit
boards

Reduce inventory cost and improve

fulfillment

Supply commit
memory
Forecast
memory

Suppliers manage your inventory

Manage your customers inventory

React quickly to supply chain

exceptions

Optional

Share forecasts and supply commits

with customers and suppliers
Get visibility to supplier capacity
Reallocate key components
Make alternate sourcing decisions

Waterfall analysis
User-configurable exceptions
Automated exception handling via
workflow

VMI and Consigned Inventory

With suppliers and customers
You

Customer

VMI Agreement

Supplier

VMI Agreement
VMI Agreement
(with customer)

VMI Agreement
(with supplier)
Check
inventory
status

Send
consumption
advice

Ship items

Receive items
Receive items
Ship items
Pay on
receipt/use
Pay on
receipt/use

24

Copyright Oracle Corporation, 2003. All rights reserved.

Supply Chain Exception Management

Highlight disruptions when they occur
Planning
run

25

Customer
lowered
forecast

Supplier
short of
commitment

Your forecast
is short of
commitment

Supplier
commits
more capacity

Next Planning
run

What is the problem?

Custom and seeded exceptions

Configurable thresholds & priorities

What is the impact?

Customer order impact analysis

via supply chain pegging

How do I resolve it?

Demand-supply allocation,
Simulation, Workflow

How well did I do?

Business intelligence

Copyright Oracle Corporation, 2003. All rights reserved.

What our customers say

Intersil
Projected savings $13M over 5 years; 30% reduction in inventory costs
"Oracle Advanced Planning has taken Intersil's business processes to the next level,
allowing us to reduce the time and cost of our demand planning efforts, which ultimately
makes us a better supplier to our customers."
-- Don
Cross, director of Operations Planning and Customer Service, Intersil Corporation

Knowles Electronics
Reduced inventory $1Million/month
We now have complete visibility into the supply chain and all the inventories. We've been
able to reduce our inventory by more than a million dollars a month just because we now
know where it is. We now have the ability to see when the product really will be available so
we can give the customers valid promised ship dates. "
-- Randy Kjell,
Director of IT, Knowles Electronics

Alcatel
50% inventory reduction leading to savings of $15M/year; 100%
outsourced
"Because of the visibility we now have across our virtual supply chain, we have been able
to significantly reduce inventory liability. Instantly sharing information about changes in
demand or supply with our outsourcing partners gives us all the most precise view of where
bottlenecks may occur. To me, this is a real competitive advantage."
-- Gary
Schliekelman, Director of Planning, Alcatel e-Business Networking Division

INTEGRATED, SCALABLE, and OPEN

27

Copyright Oracle Corporation, 2003. All rights reserved.

Take Advantage of Seamless Integration

Integrated demand, inventory, and supply planning solution

Sales and Operations

Planning

DP

Demand Planning

Forecast and
demand variability

Forecast

Inventory Optimization

IO

Time-phased safety stocks

ASCP

Supply Chain and Manufacturing Planning

Constrained
plans
Global Order Promising

GOP

Supplier capacity

Supply
commits

Order
forecast

Order
forecast

CP

Collaborative Planning

Suppliers

Customer
forecast

Customers

Scalable and Open Architecture

Open and Scalable

Internal Users

Trading partners

Runs against all versions of

Oracle E-Business Suite

Portals

Internet

Express
OLAP

Oracle 10.7, 11.0, 11i

A
P
I
XML S

EDI
Flat file

KPIs

Workflows

Standards based

Order Promising
Engine

Plans

Supports 10.7, 11.0, 11i

Can be deployed in
distributed mode

Deploy against any other

ERP or legacy system
XML, EDI, and flat file formats

Reliable
Advanced Planning

Legacy Systems

All plan information resides in

the database
Hot backup and recovery

Enterprise and trading partner

portals

Summary

30

Copyright Oracle Corporation, 2003. All rights reserved.

Move from black and white

Multi-step, high latency, limited collaboration
Customers

Suppliers
Tier 2

Tier 1

Distribution
Plans

Marketing
Forecast

Production
Plans

Manufacturing
Plans

Sales
Forecast

Manufacturing
Forecast
Demand Planning Process

?
t = weeks
Supply Planning Process

 to Color: Oracle Advanced Planning

E-Business planning solution: zero latency, real-time collaboration
Customers

Suppliers
Tier 2

Tier 1

Internet
Portal

Portal
Collaborative Planning Process

Collaborative
demand plan

Automated
exceptions

Marketing
Forecast

Collaborative
supply plan

Automated
exceptions

Single Holistic
Plan

Automated
exceptions

Sales
Forecast

Manufacturing
Forecast
Demand Planning Process

Consensus
Forecast
t = hours
Supply Planning Process

Why Upgrade to Advanced Planning

Low risk, high value transition to a better planning system
Achieve significant value with a better planning system

Improve customer service up to 35%

Reduce inventory up to 50%
Improve forecast up to 35%
Reduce planning cycle time to hours

Progress at your own pace, transition gradually

Quickly start with unconstrained planning

Move up to constrained or optimized planning
Leverage out-of-the-box integration to rapidly extend planning footprint

Leverage your existing Oracle ERP and MRP investment

33

Youve already done most of the work by setting up and maintaining the
core business data elements

Copyright Oracle Corporation, 2003. All rights reserved.

Q&
A

Q U E S T I O N S
A N S W E R S

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Copyright Oracle Corporation, 2003. All rights reserved.